As is well known in the art, a supplier of electrical power generates electricity at one or more generation facilities 2, 4, and maintains an electrical grid 6 and transformer facilities 8 (FIG. 1). Typically, a local utility company operates a local distribution infrastructure 10 and associated transformer facilities 12, and delivers the electricity via a service drop 14 to a consumer's premises 16. The electricity provided to the premises 16 passes through a utility meter 18.
The total demand on the grid (and consequently on the generation facilities) varies widely over time. Ideally, the supplier should be able to meet peak demand, whenever it occurs. However, because demand varies widely, a grid and generation facilities which are constructed to meet peak demand are, by definition, overbuilt for the “average” demand. Significant costs are incurred in order for the grid and the generation facilities to be large enough to meet peak demand. If peak demand can be reduced, then the costs of building, maintaining, and operating the generation facilities and the grid can be reduced accordingly, ultimately resulting in benefits to all parties.
One approach has been to vary the costs to the consumer, depending on demand. In the past a variety of methods of assigning electrical energy pricing have been developed. Large consumers of electricity have been charged for their usage based on the peak demand, encouraging them to minimize peak demand which reduces the maximum generation capacity required in the system. Smaller consumers have been charged a fixed price per unit of usage which reflects the average cost based on typical costs and usage patterns. Recent improvements in technology have permitted the introduction of “smart” utility meters, which gather information about both the amount of energy consumption and time of consumption, i.e., the time of day when the consumption takes place. Smart meters provide the means to bill small consumers (e.g., residential consumers) a varying cost for electrical energy which more accurately reflects the true cost to generate and deliver the electricity at the time it is consumed. This development could provide an incentive for small consumers to utilize electrical energy during low-cost periods. A version of this approach is called “Time Of Use” (TOU) pricing.
Smart meters enable the residential consumer to modify consumption behavior, to minimize costs to the consumer. However, this is a cumbersome approach, in that the residential consumer must review the costs for a past period, and then make a conscious effort to modify usage patterns. Also, it does not provide the residential consumer with any way to react to dynamic, changing conditions. Additional means are needed to provide the consumer with the ability to react quickly to electricity price fluctuations (e.g., on a daily or hourly basis) and manage their consumption accordingly. Furthermore, electrical system suppliers need effective means to dynamically reduce energy consumption at times of high demand without resorting to brownouts and blackouts.
“Demand response” systems have also been developed to limit peak demand in an electrical power grid. In one type of demand response system, the small consumer agrees to allow the supplier to disconnect load devices (e.g., the consumer's appliances and other load devices) when the grid is unable to meet all the demands made on it. Typically, the small consumer is induced to participate by appropriate incentives.
However, the known demand response systems allow the supplier to determine when load devices are to be disconnected, and may require the supplier to determine which of the small consumer's load devices are to be disconnected. This can be generally unsatisfactory for either or both of the consumer and the supplier. For example, the consumer is required to endure the inconvenience of appliances being disconnected without notice. Also, the supplier may not be willing or able to invest the time, effort or cost required to maintain records which would include the relevant details of the various load devices in many residences and businesses.